How does Income Tax Payment work in Japan?

Jul 16, 2016

Income tax payment: Japanese System

Everyone living in Japan, who gets a regular salary income, have to pay 3 income taxes namely (National Income Taxes, Prefectural Income Taxes and Municipal Income Taxes)

スクリーンショット 2016-07-16 10.24.47


If not withheld by the employer, national income taxes are due in full by March 15 of the following year, with two prepayments paid in July and November of the running tax year. If you choose to pay your income taxes by automatic bank transfer, you have to pay until the middle of April. Prepayments are calculated based on the previous year’s income. So you do not pay them during your first year in Japan.

For short, if you had to pay national income taxes for 2015, they had to be fully paid by March 15, 2016, with the prepayments paid in July and November 2015.

They had to be fully paid by April 20, 2016 in case of payment by automatic bank transfer, with the prepayments paid in July and November 2015. In case that the prefectural and municipal income taxes are not withheld by the employer, they are to be paid in quarterly installment during the following year. For example, the 2015 taxes are paid in four installments which is in June, August, October 2016 and January 2017.


Japanese Tax Rates

The tax rate is determined based on the taxable income you receive.
Same as other countries, taxable income is the total earnings minus the basic exemption,

Exemptions for dependents and various types of deductions, such as deductions for insurance premiums, medical expenses and business expenses of the self-employed.

National Income Tax Rates

    ~Taxable income~                               ~Tax rate~

less than 1.95 million yen           5% of taxable income

1.95 to 3.3million yen                10% of taxable income minus 97,500 yen

3.3 to 6.95 million yen              20% of taxable income minus 427,500 yen

6.95 to 9 million yen                 23% of taxable income minus 636,000 yen

9 to 18 million yen                     33% of taxable income minus 1,536,000 yen

18 to 40 million yen                  40% of taxable income minus 2,796,000 yen

More than 40 million yen        45% of taxable income minus 4,796,000 yen

Prefectural Income Tax Rates

~Taxable income~                 ~Tax rate~

all                                       4% of taxable income

<Municipal income tax rates>

~Taxable income~                 ~Tax rate~

all                                6% of taxable income

Prefectural enterprise tax rates (in case of self-employed persons)

~Taxable income~                 ~Tax rate~

all                                3%~5% depends on the type of business

スクリーンショット 2016-07-16 10.24.31



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